How do medical costs work?

If you receive medical treatment in a hospital as a private patient, Medicare will pay 75% of the Medical Benefits Schedule (MBS) fee. The MBS fee is the amount the government defines as fair. The fee for each service differs and you can usually find it online if you get the MBS fee number from your doctor. If you have private health insurance , this will ordinarily cover the remaining 25%. However, you still might have out-of-pocket expenses, also known as the gap. This is when the doctor treating you charges more than the MBS fee. Medical professionals in Australia are under no obligation to adhere to the MBS fee, meaning you still might have out-of-pocket expenses even if you have private health insurance . For specific services, such as weight loss surgery or treatment for your tonsils or your kidneys, it's often the case that the recommended MBS fee is far less than what most doctors charge, meaning you're more likely to have out-of-pocket expenses. For example, an ankle replacement in NSW has typical specialists' fees of $4,900, but Medicare typically pays just $1,700.

What factors impact medical costs?

Ever wonder why medical costs can differ so much. Here are some of the main reasons: Location. Doctors charge differently depending on the area. Sometimes, this has a lot to do with patient load. Other times, it might be because you live in an expensive city like Sydney or in a rural area. Procedures. Some procedures cost more than others, partly due to their complexity and the technology involved. Skill shortages. If there aren't as many doctors who specialise in a specific field, you might have to pay more for treatment. Quality of service. Australia attracts some of the best medical professionals in the world. As a result, some doctors and medical specialists charge considerably more than others – and more than the MBS fee – because they claim to offer better services than others. This may well be the case and some people are happy to pay more for their treatment. A lack of accountability. The fact is, private health care is a business built upon profits. If doctors can charge more, many probably will since there's no obligation to adhere to the MBS fee. Efficiency. In principle, you pay for what you get. Private health care generally has shorter waiting times when compared to public care.

How to compare medical costs if you need treatment?

There are a number of things you can do to figure out if you will have out-of-pocket expenses. Call around to different doctors to get a few different quotes. This ensures you don't just go with the first person and potentially pay much more than if you went elsewhere. Get a Medicare MBS code. This is so you know how much Medicare and private health insurance will cover. Get this code from your doctor and give it to your private healthcare provider. Look on the Medical Costs Finder to see how much you are likely to pay. Alternatively, look at the table above for a breakdown of the costs for services by state. This shows what the average out-of-pocket expenses are, which you can then compare with the quotes you have received. Find out if your surgeon is in your private health insurer's preferred list. Sometimes, your health provider will only cover certain doctors, so be sure to confirm this with your insurer beforehand.

Medical costs comparison for Australia

Who’s this health cover for?

Private hospital insurance will not cover everything when you go into hospital.
The difference between the cost of a treatment and what is covered is called the gap.
These out-of-pocket costs can be estimated ahead of time by using government data or calling your health fund.

How out of pocket medical costs work in Australia

If you have Medicare, you have 2 options for receiving hospital treatment: public or private. In the public system, Medicare will generally pay all of your costs.

If you choose private hospital care, your costs can be covered in a few ways. Medicare will still pay some, but a private health fund can also cover some of your fees. If you don't have private health cover, then you'd need to pay for the entire private procedure. If you do have private hospital cover for your treatment, then there may still be out of pocket costs.

Finder survey: How many Australians of different ages worry about being able to pay for medical bills?

Response	75+ yrs	65-74 yrs	55-64 yrs	45-54 yrs	35-44 yrs	25-34 yrs	18-24 yrs
No	61.36%	50.58%	50.93%	40.24%	36.76%	47.89%	43.53%
Yes	25%	32.56%	35.4%	40.24%	43.24%	34.74%	44.71%
Somewhat	13.64%	16.86%	13.66%	19.53%	20%	17.37%	11.76%

Source: Finder survey by Pure Profile of 1006 Australians, December 2023

Compare medical costs across Australia

The table below compares some costs of common medical procedures in 5 different states. The data comes from Medical Costs Finder, a tool managed by the Department of Health and Aged Care. The data was last updated on 29 September 2023.

Typical specialists’ fees refers to the cost of specialists, assistant surgeons, and anaesthetists. It doesn't include hosptial fees, which are generally either mostly or fully covered by private health insurance funds.
Patients typically paid refers to the the median amount paid by the typical patient, after Medicare and Private Health insurance benefits were paid.
Patients typically paid refers to the the median amount paid by the typical patient, after Medicare and Private Health insurance benefits were paid.
% with no out-of-pocket costs refers to the proportion of partients that didn't have to pay any out of pocket costs.

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	33%	$1,500	$810
Ankle replacement	30%	$5,700	$1,500
Knee reconstruction	28%	$4,500	$2,300
Knee arthroscopy	45%	$2,500	$850
Breast biopsy	41%	$2,200	$440
Breast reduction	9%	$11,000	$8,600
Caesarean section (complex)	43%	$4,600	$500
Caesarean section (no complications)	51%	$3,500	$500
Cataract surgery	69%	$2,100	$500
Colonoscopy	83%	$1,300	$250
Dialysis	NA	NA	NA
Gastric band	NA	NA	NA
Gastric bypass	44%	$3,900	$1,100
Gastroscopy	83%	$960	$190
Heart-related angiogram	87%	$1,900	$60
Heart valve replacement (not TAVI)	34%	$15,000	$510
Hip replacement (bilateral)	22%	$9,900	$5,500
Hip replacement	33%	$5,300	$1,100
Femoral or inguinal hernia repair	53%	$2,200	$560
Knee replacement	38%	$5,200	$1,100
Laparoscopy	48%	$2,800	$540
Male contraception (e.g. vasectomy)	46%	$1,200	$510
Total mastectomy (remove breast)	50%	$3,800	$520
Pacemaker	53%	$2,600	$60
Patella stabilisation (stabilise the kneecap)	35%	$3,500	$1,300
Prostatectomy (endoscopic)	46%	$3,400	$820
Pterygium surgery	58%	$1,700	$250
Removal of skin lesion	52%	$1,700	$500
Retinal detachment repair - surgery	54%	$3,300	$400
Rotator cuff repair	32%	$3,900	$2,000
Septoplasty	29%	$2,700	$1,000
Shoulder replacement	32%	$6,000	$2,500
Sinus surgery	39%	$3,400	$840
Sleep studies	99%	$730	$20
Sleeve gastrectomy (partial stomach removal)	51%	$3,200	$880
Stress incontinence	45%	$3,000	$1,500
Tonsillectomy with or without adenoidectomy (12 years of age and over)	30%	$2,100	$1,300
Turbinectomy (remove small nasal bones)	24%	$1,800	$860
Umbilical hernia repair	57%	$1,700	$590
Vaginal delivery (no complications)	70%	$2,900	$500
Vaginal delivery (complex)	61%	$3,600	$500
Vaginal repair	49%	$3,300	$680
Varicose veins	53%	$1,900	$400
Wound debridement	66%	$1,700	$380

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	20%	$1,100	$400
Ankle replacement	17%	$4,400	$560
Knee reconstruction	16%	$3,800	$570
Knee arthroscopy	26%	$2,100	$390
Breast biopsy	20%	$2,100	$280
Breast reduction	12%	$9,400	$7,200
Caesarean section (complex)	38%	$4,400	$450
Caesarean section (no complications)	35%	$3,400	$400
Cataract surgery	30%	$1,900	$300
Colonoscopy	79%	$1,100	$130
Dialysis	NA	NA	NA
Gastric band	28%	$3,100	$500
Gastric bypass	21%	$4,800	$1,100
Gastroscopy	79%	$910	$130
Heart-related angiogram	85%	$2,000	$110
Heart valve replacement (not TAVI)	27%	$13,000	$470
Hip replacement (bilateral)	8%	$10,000	$5,500
Hip replacement	18%	$5,500	$730
Femoral or inguinal hernia repair	34%	$1,800	$280
Knee replacement	20%	$5,100	$600
Laparoscopy	29%	$2,500	$380
Male contraception (e.g. vasectomy)	33%	$980	$200
Total mastectomy (remove breast)	23%	$4,200	$500
Pacemaker	51%	$2,300	$50
Patella stabilisation (stabilise the kneecap)	17%	$3,200	$520
Prostatectomy (endoscopic)	32%	$2,900	$400
Pterygium surgery	21%	$1,700	$270
Removal of skin lesion	70%	$1,500	$250
Retinal detachment repair - surgery	13%	$3,500	$250
Rotator cuff repair	22%	$3,300	$520
Septoplasty	20%	$2,400	$580
Shoulder replacement	21%	$5,700	$620
Sinus surgery	27%	$2,800	$450
Sleep studies	96%	$730	$10
Sleeve gastrectomy (partial stomach removal)	35%	$3,500	$540
Stress incontinence	29%	$2,300	$260
Tonsillectomy with or without adenoidectomy (12 years of age and over)	21%	$1,600	$500
Turbinectomy (remove small nasal bones)	20%	$1,400	$480
Umbilical hernia repair	37%	$1,400	$270
Vaginal delivery (no complications)	69%	$2,800	$350
Vaginal delivery (complex)	45%	$4,300	$430
Vaginal repair	25%	$3,200	$420
Varicose veins	33%	$2,100	$300
Wound debridement	53%	$1,600	$200

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	23%	$1,300	$400
Ankle replacement	13%	$4,500	$5,700
Knee reconstruction	19%	$4,100	$1,000
Knee arthroscopy	25%	$2,300	$650
Breast biopsy	22%	$2,500	$700
Breast reduction	7%	$9,800	$7,800
Caesarean section (complex)	46%	$4,800	$500
Caesarean section (no complications)	41%	$3,600	$500
Cataract surgery	40%	$2,100	$450
Colonoscopy	80%	$1,200	$130
Dialysis	99%	$80	$0
Gastric band	NA	NA	NA
Gastric bypass	19%	$3,500	$500
Gastroscopy	80%	$960	$100
Heart-related angiogram	64%	$2,000	$10
Heart valve replacement (not TAVI)	32%	$16,000	$480
Hip replacement (bilateral)	16%	$8,400	$2,400
Hip replacement	19%	$5,000	$1,000
Femoral or inguinal hernia repair	28%	$2,100	$500
Knee replacement	22%	$4,800	$990
Laparoscopy	24%	$2,800	$690
Male contraception (e.g. vasectomy)	40%	$1,200	$440
Total mastectomy (remove breast)	21%	$4,200	$800
Pacemaker	42%	$2,700	$40
Patella stabilisation (stabilise the kneecap)	22%	$3,300	$900
Prostatectomy (endoscopic)	26%	$3,300	$580
Pterygium surgery	24%	$1,800	$450
Removal of skin lesion	35%	$1,800	$500
Retinal detachment repair - surgery	40%	$4,000	$630
Rotator cuff repair	21%	$3,400	$890
Septoplasty	23%	$2,500	$690
Shoulder replacement	16%	$5,400	$1,000
Sinus surgery	25%	$3,200	$760
Sleep studies	99%	$730	$10
Sleeve gastrectomy (partial stomach removal)	17%	$3,000	$850
Stress incontinence	16%	$2,600	$680
Tonsillectomy with or without adenoidectomy (12 years of age and over)	22%	$1,700	$570
Turbinectomy (remove small nasal bones)	26%	$1,500	$540
Umbilical hernia repair	29%	$1,700	$500
Vaginal delivery (no complications)	78%	$2,900	$300
Vaginal delivery (complex)	55%	$3,700	$450
Vaginal repair	30%	$3,300	$690
Varicose veins	17%	$2,300	$880
Wound debridement	37%	$1,800	$500

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	44%	$1,000	$270
Ankle replacement	NA	NA	NA
Knee reconstruction	19%	$3,500	$280
Knee arthroscopy	27%	$1,900	$190
Breast biopsy	54%	$2,300	$150
Breast reduction	9%	$5,600	$3,600
Caesarean section (complex)	25%	$5,000	$300
Caesarean section (no complications)	23%	$3,400	$250
Cataract surgery	49%	$1,900	$300
Colonoscopy	90%	$1,200	$120
Dialysis	NA	NA	NA
Gastric band	NA	NA	NA
Gastric bypass	12%	$4,200	$500
Gastroscopy	91%	$930	$100
Heart-related angiogram	92%	$2,100	$10
Heart valve replacement (not TAVI)	50%	$12,000	$300
Hip replacement (bilateral)	NA	NA	NA
Hip replacement	28%	$4,700	$350
Femoral or inguinal hernia repair	43%	$1,600	$200
Knee replacement	30%	$4,600	$350
Laparoscopy	20%	$2,600	$320
Male contraception (e.g. vasectomy)	38%	$880	$150
Total mastectomy (remove breast)	56%	$4,000	$210
Pacemaker	55%	$2,600	$40
Patella stabilisation (stabilise the kneecap)	21%	$2,700	$240
Prostatectomy (endoscopic)	47%	$2,700	$220
Pterygium surgery	55%	$1,900	$500
Removal of skin lesion	62%	$1,400	$250
Retinal detachment repair - surgery	NA	NA	NA
Rotator cuff repair	30%	$2,800	$250
Septoplasty	18%	$2,200	$530
Shoulder replacement	38%	$4,800	$300
Sinus surgery	25%	$3,100	$500
Sleep studies	NA	NA	NA
Sleeve gastrectomy (partial stomach removal)	15%	$3,500	$500
Stress incontinence	14%	$2,300	$500
Tonsillectomy with or without adenoidectomy (12 years of age and over)	19%	$1,500	$430
Turbinectomy (remove small nasal bones)	30%	$1,400	$400
Umbilical hernia repair	32%	$1,300	$150
Vaginal delivery (no complications)	56%	$2,900	$250
Vaginal delivery (complex)	45%	$3,100	$200
Vaginal repair	39%	$2,800	$350
Varicose veins	21%	$1,600	$160
Wound debridement	66%	$1,500	$160

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	49%	$1,200	$510
Ankle replacement	NA	NA	NA
Knee reconstruction	47%	$3,500	$470
Knee arthroscopy	57%	$2,000	$450
Breast biopsy	22%	$2,700	$560
Breast reduction	6%	$8,800	$6,900
Caesarean section (complex)	72%	$4,900	$440
Caesarean section (no complications)	76%	$3,400	$280
Cataract surgery	85%	$1,700	$110
Colonoscopy	95%	$1,100	$110
Dialysis	NA	NA	NA
Gastric band	NA	NA	NA
Gastric bypass	76%	$3,800	$500
Gastroscopy	94%	$850	$130
Heart-related angiogram	92%	$2,000	$20
Heart valve replacement (not TAVI)	26%	$16,000	$350
Hip replacement (bilateral)	NA	NA	NA
Hip replacement	55%	$4,200	$450
Femoral or inguinal hernia repair	69%	$1,800	$300
Knee replacement	55%	$4,000	$350
Laparoscopy	56%	$2,600	$360
Male contraception (e.g. vasectomy)	53%	$1,100	$470
Total mastectomy (remove breast)	26%	$3,600	$500
Pacemaker	62%	$2,000	$50
Patella stabilisation (stabilise the kneecap)	47%	$2,800	$350
Prostatectomy (endoscopic)	49%	$2,800	$720
Pterygium surgery	75%	$1,500	$210
Removal of skin lesion	54%	$1,500	$260
Retinal detachment repair - surgery	NA	NA	NA
Rotator cuff repair	58%	$2,800	$440
Septoplasty	21%	$2,700	$510
Shoulder replacement	62%	$4,400	$300
Sinus surgery	31%	$2,800	$500
Sleep studies	99%	$760	$70
Sleeve gastrectomy (partial stomach removal)	35%	$6,300	$4,000
Stress incontinence	31%	$2,400	$1,200
Tonsillectomy with or without adenoidectomy (12 years of age and over)	25%	$1,500	$550
Turbinectomy (remove small nasal bones)	27%	$1,500	$530
Umbilical hernia repair	69%	$1,500	$220
Vaginal delivery (no complications)	83%	$2,700	$190
Vaginal delivery (complex)	NA	NA	NA
Vaginal repair	56%	$3,300	$870
Varicose veins	64%	$1,600	$40
Wound debridement	61%	$1,700	$460

Frequently asked questions

If you receive medical treatment in a hospital as a private patient, Medicare will pay 75% of the Medical Benefits Schedule (MBS) fee. The MBS fee is the amount the government defines as fair. The fee for each service differs and you can usually find it online if you get the MBS fee number from your doctor. If you have private health insurance, this will ordinarily cover the remaining 25%.
However, you still might have out-of-pocket expenses, also known as the gap. This is when the doctor treating you charges more than the MBS fee. Medical professionals in Australia are under no obligation to adhere to the MBS fee, meaning you still might have out-of-pocket expenses even if you have private health insurance.
For specific services, such as weight loss surgery or treatment for your tonsils or your kidneys, it's often the case that the recommended MBS fee is far less than what most doctors charge, meaning you're more likely to have out-of-pocket expenses. For example, an ankle replacement in NSW has typical specialists' fees of $4,900, but Medicare typically pays just $1,700.
Ever wonder why medical costs can differ so much. Here are some of the main reasons:
- Location. Doctors charge differently depending on the area. Sometimes, this has a lot to do with patient load. Other times, it might be because you live in an expensive city like Sydney or in a rural area.
- Procedures. Some procedures cost more than others, partly due to their complexity and the technology involved.
- Skill shortages. If there aren't as many doctors who specialise in a specific field, you might have to pay more for treatment.
- Quality of service. Australia attracts some of the best medical professionals in the world. As a result, some doctors and medical specialists charge considerably more than others – and more than the MBS fee – because they claim to offer better services than others. This may well be the case and some people are happy to pay more for their treatment.
- A lack of accountability. The fact is, private health care is a business built upon profits. If doctors can charge more, many probably will since there's no obligation to adhere to the MBS fee.
- Efficiency. In principle, you pay for what you get. Private health care generally has shorter waiting times when compared to public care.
There are a number of things you can do to figure out if you will have out-of-pocket expenses.
- Call around to different doctors to get a few different quotes. This ensures you don't just go with the first person and potentially pay much more than if you went elsewhere.
- Get a Medicare MBS code. This is so you know how much Medicare and private health insurance will cover. Get this code from your doctor and give it to your private healthcare provider.
- Look on the Medical Costs Finder to see how much you are likely to pay. Alternatively, look at the table above for a breakdown of the costs for services by state. This shows what the average out-of-pocket expenses are, which you can then compare with the quotes you have received.
- Find out if your surgeon is in your private health insurer's preferred list. Sometimes, your health provider will only cover certain doctors, so be sure to confirm this with your insurer beforehand.

Sources

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Written by

Tim Bennett

Insurance expert

A seasoned journalist with over 10 years of experience in news, politics and finance reporting, Tim has previously held roles at the ABC, SBS and Fairfax Media. Tim’s expert insights have been quoted in The Australian, The Daily Telegraph, The Courier Mail and more. He regularly appears on TV and radio, and has been interviewed on 7 News, Sunrise, SBS News, ABC Local, 3AW and 5AA. Tim is passionate about simplifying complex insurance topics for Australian consumers. He holds a Bachelor of Arts (Politics) from Macquarie University and a Tier 1 General Insurance (General Advice) certification, which meets the requirements of ASIC Regulatory Guide 146 (RG146). If you’re interested in a media interview with Tim, please reach out to our PR team at aupr@finder.com. See full bio

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Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

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Medical costs comparison

Private health insurance may not cover everything. It's super key to know how to figure out what gap you'll pay out of pocket.

Key takeaways

How out of pocket medical costs work in Australia

Finder survey: How many Australians of different ages worry about being able to pay for medical bills?

Compare medical costs across Australia

Frequently asked questions

Sources

Tim Bennett

Gary Ross Hunter

Get rewarded $$ for switching with Finder Rewards

Ask a question

More guides on Finder

Medical costs comparison

Private health insurance may not cover everything. It's super key to know how to figure out what gap you'll pay out of pocket.

Key takeaways

How out of pocket medical costs work in Australia

Finder survey: How many Australians of different ages worry about being able to pay for medical bills?

Compare medical costs across Australia

Frequently asked questions

How do medical costs work?

What factors impact medical costs?

How to compare medical costs if you need treatment?

Sources

Tim Bennett

Gary Ross Hunter

Get rewarded $$ for switching with Finder Rewards

Ask a question

More guides on Finder

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